Portfolio Business North Sea


Stormy water


Will Peakin Business Correspondent


Collaboration between potentially competing industries is not just a Scottish issue, but pan- European


Bertie Armstrong has a distinct insight


into how the relationship between Scotland’s oil and gas industry and its burgeoning renewables sector might develop. As chief executive of the Scottish Fishermen’s Federation, Armstrong knows how his own industry’s fortunes have necessarily been entwined with the global demand for hydrocarbons. Now, with the pursuit for greener sources of energy, the North Sea has another player to accommodate. “On the one hand, we have the super


economic club of the oil and gas industry, and on the other, the super sexy club of the renewables industry. And then there is fishing,” said Armstrong. “Fishermen have collaborated well as an industry with oil and gas producers, but they have never had the chance to compete on anything like a flat playing field. Renewable energy is creating an even bigger bow wave.” According to Paul Dymond, operations


manager of Oil and Gas UK, the industry’s representative body, it has historically taken a responsible view of its impact on fishing. “Te sharing of common waters between the oil and gas industry and the fishing industry requires good working relationships and attention to potential interactions, especially with respect to safety,” he said. Te industry has taken positive steps to


develop methods and systems that allow both industries to work safely and efficiently together and to promote harmonious working relations, he said. Tere is an un-attributable compensation fund which provides redress to skippers for loss or damage to fishing gear caused by oil-related debris. A Fishing Legacy Trust Company has been set up and the industry continues to invest in FishSAFE10, an electronic system which protects fishing boat skippers in the North Sea, warning them of approaching hazards and clearly displaying where surface and subsea oil and


60 Holyrood January 2011


gas structures are located. In its relationship with renewables, the


oil and gas industry believes there is clear potential not just for mutual respect between the two; but active collaboration, particularly in terms of transferable skills and technology. And it rejects recent suggestions that it was prepared to take legal action to protect its territorial interests. “In order to meet the UK’s


“We have the super economic club of oil and


gas and the super sexy club of the renewables”


future energy needs, we are going to have to invest in all forms of energy, including oil and gas and renewables,” said David Odling, Oil & Gas UK’s energy policy manager. “It is important therefore that the two


industries – offshore hydrocarbons and wind – work together, particularly in areas such as Hornsea where permissions have been granted for wind farm development in zones already licensed for many years for oil and gas exploration and production and where production of gas is widespread.


“Our call is for greater co-operation, not


less and I can assure you that threatening legal action is furthest from our minds. On the contrary, Oil & Gas UK held a joint workshop in our offices just two weeks ago at the end of October with Renewable UK. Tis was very well attended by both our members and representatives from the wind energy developers. “Its purpose was to improve communications


and liaison between the two sectors; promote common understanding and establish a plan for solving some of the emerging issues, with the intention of achieving peaceful co- existence between the two industries. Te meeting was very helpful and will provide a firm foundation upon which future relations can be built. It is hoped that we can emulate the extent of collaboration we have achieved working with the fishing industry in the North Sea over the past forty years.” But despite Scotland’s aspirations to develop


its renewables capacity, it cannot ignore the oil and gas industry’s economic significance. It is currently supplying two-thirds of the UK’s primary energy needs, meeting 97 per cent of its oil demand and 73 per cent of its gas demand. It is also an important export business and a world leader in high-tech engineering and offshore energy services such as sub-sea systems. Te UK has produced 39 billion barrels of oil and gas to-date and up to 25 billion more are still to be recovered. “Te investment outlook is good and


likely to rise,” said Paul Dymond. “Between 2010 and 2020 £60 billion is to be invested in oil and gas, comparable to the proposed investment in wind farms. Global demand for energy is increasing steadily. Wind, solar and biofuels are expanding rapidly: but from a very small initial base. Oil and gas will remain the primary energy source for many years to come. In the UK, even as we head towards a low carbon economy, oil and gas will account for 70 per cent of our primary energy needs in 2020. Oil remains the key


feedstock for the materials needed in modern life.” Some new petroleum production licences


overlap with wind-farm lease zones, providing a strong case for better spatial planning, good working relationships and meaningful consultation, said Dymond. Te view of the oil and gas industry is that authorities must continue to allow access for exploration and production activities in the North Sea and continue to promote recovery of new hydrocarbon resources. “Tere must


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